US recovery concerns weigh on dollar

Tokyo - The dollar lost ground in Asian trade on Thursday after a warning from the US Federal Reserve that the world's top economy was slowing in some areas, adding to the view that recovery was stalling.

With investor confidence taking a hit, the dollar slipped to ¥87.20 from ¥87.78 in New York on Wednesday afternoon amid heightened safe-haven demand.

The euro stood at $1.3017, slightly up from $1.2997 in New York. The single currency fetched ¥113.47 compared with ¥113.63.

Softer stock markets in Europe and the US on Wednesday reflected moderation in investor risk-appetite, said John Kyriakopoulos of National Australia Bank, as the run of weaker-than-expected US economic reports continued.

Durable goods orders fell for a second consecutive month in June, while the US Fed published its latest Beige Book report Wednesday, warning the "modest" US economic recovery was slowing in some parts of the country.

"Risk aversion dominated across most asset classes," as a result, noted Credit Agricole in a report.

A smaller-than-expected rise in Australia's inflation rate in the second quarter of 2010 continued to hurt the Australian dollar, which was flat at $0.8928 after falling from $0.9003 on Wednesday.

The US dollar was trading mixed against other Asian currencies.

It fell to 32.03 Thai baht from 32.22 on Wednesday and to 8 990.94 Indonesian rupiah from 9 000.

It firmed to $1.3658 Singapore dollars from $1.3627, to 48.81 Philippine pesos from 45.90, and to 1 185.55 South Korean won from 1 183.05

It was unchanged at $32.00 Taiwan dollars.

  - AFP